Category: Stock Market

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) continues its long run as the most shorted ASX share even though its short interest eased slightly to 21.2%. Short sellers don’t seem to believe that lithium prices will improve any time soon.
• Syrah Resources Ltd (ASX: SYR) has short interest of 16.4%, which is up week on week again. This has been driven by weak graphite prices.
• Core Lithium Ltd (ASX: CXO) has short interest of 12.6%, which is down slightly week on week. Falling lithium prices mean that this miner has just announced plans to suspend production to conserve cash.
• Sayona Mining Ltd (ASX: SYA) has 11.4% of its shares held short, which is up week on week again. Last week the lithium miner announced the start of a strategic review of its operations in the face of weak prices.
• IDP Education Ltd (ASX: IEL) has 10.2% of its shares held short, which is flat week on week. This language testing and student placement company’s shares came under pressure last week after Canada announced limits to student visas.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 8.9%. Short sellers may believe the gold miner overpaid for recent acquisitions.
• Deep Yellow Limited (ASX: DYL) has seen its short interest fall again to 8.7%. While there are concerns that a capital raising is coming, strong uranium prices have helped drive its shares notably higher this month, much to the dismay of short sellers.
• Weebit Nano Ltd (ASX: WBT) has short interest of 8.5%, which is up week on week. Short sellers appear to believe this semiconductor company is another meme stock.
• Flight Centre Travel Group Ltd (ASX: FLT) has 8.4% of its shares held short, which is up slightly week on week. Short sellers may believe the market’s growth assumptions are too ambitious.
• Chalice Mining Ltd (ASX: CHN) has entered the top ten with short interest of 6.8%. This mineral exploration company’s shares have crashed 84% over the last 12 months. Short sellers appear to believe there’s further to fall.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• If I invested $10,000 into Pilbara Minerals shares 10 years ago, I would have…
• Here are the top 10 ASX 200 shares today
• Core Lithium shares dive 5% on exploration update
• Is now the time to buy Flight Centre shares for passive income?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX growth shares took a pummelling in 2022, but many then saw a strong recovery in 2023. Is it time to focus on rapidly growing businesses?

Inflation and higher interest rates hurt ASX growth shares a lot. Why? We need to determine how much we think a company might be worth in three or five years and then discount that value to today.

The interest rate plays a large part in the discount rate investors use – the higher the interest rate, the bigger the discount rate used to get to today’s value.

Strong performance by growth funds

According to reporting by The Australian, performance tracking by Mercer showed that growth-focused funds made up all 10 top spots in its investment performance table for the 2023 calendar year.

The top-performing fund for the year was from Hyperion, which fell 25.4% in 2022 and rose 25.1% in 2023. Hyperion fund managers Mark Arnold and Jason Orthman think the change to artificial intelligence and machine learning is a “paradigm shift” that may have the potential “to create a rarely seen opportunity to increase equity values”.

Is this a good time to invest in ASX growth shares?

The second-best performing fund was from ECP Asset Management, with fund manager Manny Pohl acknowledging his fund faced “severe headwinds in the form of multiple compression as discount rates rose”. But, he also said that (discount) rates were more likely to be flat or down, which could mean the headwinds it faced “should become tailwinds for the portfolio”.

The largest positions in the ECP portfolio that did well last year were Block Inc (ASX: SQ2), Megaport Ltd (ASX: MP1) and GQG Partners Inc (ASX: GQG).

The Australian reported on comments from Dushko Bajic, First Sentier’s head of Australian equities growth, who looks for companies that can deliver strong growth of revenue, earnings, cash flow and make returns stronger than their cost of capital. He focuses on businesses where a change in the return on invested capital could be a potential share price catalyst.

Some of the best ASX growth share performers in the First Sentier portfolio included Pro Medicus Ltd (ASX: PME), WiseTech Global Ltd (ASX: WTC), Xero Limited (ASX: XRO) and REA Group Limited (ASX: REA).

Bajic said:

That sort of keeps you on your toes and also gives you a good reason to look at other parts of the market, because industry structure can change – competitive intensity can increase or decrease, as can capex requirements and that can fundamentally change rates within industries and companies.

So that gives us a good reason to look at all parts of the market.

You’ve always got to be careful what you pay for these wonderful attributes of earnings growth, cash flow generation and higher return on investment capital.

Interestingly, Bajic believes 2024 will be a “steadier year” without the “depressed base” there was before 2023.

The post Are ASX growth shares back? How these fundies delivered over 20% upside in 2023 appeared first on The Motley Fool Australia.

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More reading

• Have $500? 2 absurdly cheap ASX shares I think long-term investors should buy right now
• Here’s how I’m targeting a generous ASX passive income in retirement!
• Why Block, Domino’s, IDP Education, and Sayona Mining shares are sinking like stones today
• The ASX 200 stock that could rocket now that Bitcoin ETFs are running
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Megaport, Pro Medicus, REA Group, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, WiseTech Global, and Xero. The Motley Fool Australia has recommended Megaport, Pro Medicus, and REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Woolworths Group Ltd (ASX: WOW) shares have done well for long-term shareholders. In the past five years, the Woolworths share price has lifted 45%, and it’s up 667% since January 1999.

As one of the biggest supermarket businesses in Australia, it’s one of the most defensive ASX shares around. It also owns quite a few different businesses, including Countdown in New Zealand, Big W, business-to-business food providers (including PFD), ‘retail platforms’ such as Primary Connect and Cartology, and other smaller businesses such as Milkrun.

What are the good points?

As I’ve mentioned, it’s a defensive business, making it a solid pick that could be resilient in recessions. People still need to eat when times are tough, so demand could stay consistent.

It’s the type of business that is very likely to benefit from Australia’s population growth.  

We learned in December 2023 from the ABS that Australia’s population had reached 26.6 million in June 2023, which represented an annual growth of 624,100 people and quarterly growth of 146,800. If there are more mouths to feed, there are more potential customers for Woolworths.

The business has an incredibly strong logistics network, and it continues to invest in advanced warehouses and other areas that keep it ahead of (nearly all) the competition.

I like the diversification that Woolworths has been making. Its latest move is to buy the business that owns Petstock, which is essentially a supermarket for pets. Woolworths’ expertise and scale could help it succeed in this business.

The company doesn’t have the world’s biggest dividend yield, but owning Woolworths shares has typically come with a decent amount of passive income. According to Commsec, the business could pay a grossed-up dividend yield of 4.4% in FY24 and 4.7% in FY25.

It has been a solid blue chip for most of the last two decades.

Negatives about Woolworths shares

It’s not exactly cheap when it comes to the price/earnings (P/E) ratio, which is mostly understandable considering the defensive nature of the company. Using the projection on Commsec, which may not be 100% spot on, the Woolworths share price is at 24x FY24’s estimated earnings. Is that a fair earnings multiple for a business that grew sales by 5.3% in the first quarter of FY24?

Woolworths is also getting a lot of heat about the price increases it has hit customers with amid this inflationary environment. If it cuts the shelf prices of products, Woolworths’ margins reduce, and it would obviously hurt the net profit after tax (NPAT) – though suffering households would benefit.

For me, there is a possible opportunity cost. I don’t think it’s going to grow profit strongly over the next few years, but there are other (smaller) ASX shares that could produce stronger returns.

The post The pros and cons of buying Woolworths shares right now appeared first on The Motley Fool Australia.

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More reading

• 3 world-class ASX retirement shares to buy now
• At 20x earnings and a 4% yield, surely I can’t ignore this ASX 200 stock?
• Woolworths share price in the red as CEO denies trying to ‘cancel’ Australia Day
• Own Woolworths shares? Here’s a $15 billion piece of news
• Goldman Sachs says these blue chip ASX 200 shares are top buys

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s not too late to snap up 100 shares of this leading S&P/ASX 200 Index (ASX: XJO) dividend stock to earn $705 of passive income in 2024.

The super ASX dividend share in question here is Macquarie Group Ltd (ASX: MQG).

The diversified ASX 200 financial stock has delivered two partly franked dividends every year since 2013.

We’ll get back to that welcome passive income in a tick.

But first…

Calculating yields and Macquarie’s recent performance

After a weak start to 2023, the Macquarie share price has had a strong run since the company reported its half year results on 3 November.

In fact, shares in this top ASX 200 passive income payer have gained 16% since the closing bell sounded on 2 November.

While the company’s operating income and net profits for the six months were down considerably year on year, its assets under management increased 7% to $892 billion. Macquarie also reported group capital surplus of $10.5 billion and a $2 billion on-market buyback.

All of which has gone to help support the share price and outlook for 2024. Which is good, because we don’t want to sacrifice potential capital gains to earn our passive income.

Now before moving on to that passive income, note that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.

While forecast yields can be useful, there’s a lot of guesswork involved. Even the world’s best analysts don’t have any more access to working crystal balls than you or me.

With that in mind, we’ll stick with the trailing yields here.

Targeting Macquarie shares for passive income

Macquarie paid its final dividend of $4.50 a share on 4 July. The interim dividend of $2.55 a share will have hit eligible shareholders’ bank accounts on 19 December, just in time for Christmas. Both were franked at 40%, offering some potential tax benefits.

That equates to a total passive income payout of $7.05 per share.

Based on the trailing yield then, 100 shares today would return a very tidy $705 in passive income in 2024.

And, of course, we’ll be hoping to see the Macquarie share price keep marching higher as well!

The post Buy 100 shares of this super ASX 200 dividend stock for $705 a year in passive income appeared first on The Motley Fool Australia.

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More reading

• Analysts say these top ASX dividend shares are buys in January
• Brokers say these ASX 200 blue-chip shares are top buys in January
• I’d buy this ASX bank share for dividends over CBA
• Top brokers name 3 ASX shares to buy next week
• Navigating rising interest rates: Top Australian stocks to watch

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you on the lookout for some ASX dividend stocks to buy? If you are, it could be worth taking a look at the three listed below.

They have all been named as buys and tipped to offer attractive dividend yields. Here’s what you need to know:

Coles Group Ltd (ASX: COL)

The first ASX dividend stock for investors to consider buying is supermarket giant Coles.

Citi remains bullish on the company right now. And while it expects a relatively flat year in FY 2024, it is forecasting solid earnings growth in FY 2025 and FY 2026.

The broker is expecting this to underpin fully franked dividends of 64 cents per share in FY 2024 and 70 cents per share in FY 2025. Based on the current Coles share price of $15.79, this will mean yields of 4% and 4.4%, respectively.

Citi currently has a buy rating and $17.50 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

If you’re not averse to investing in the resources sector, then Goldman Sachs thinks that Rio Tinto’s shares are a buy right now.

The broker believes the mining giant is an ASX dividend stock to buy because of its “compelling relative valuation vs. peers.” It also highlights its “attractive FCF and Div yield.”

In respect to the latter, Goldman is forecasting fully franked dividends per share of US$4.61 (A$7.00) in FY 2024 and then US$4.62 (A$7.02) in FY 2025. Based on the latest Rio Tinto share price of $132.63, this will mean yields of approximately 5.3% in both years.

The broker has a buy rating and $141.80 price target on the miner’s shares.

Rural Funds Group (ASX: RFF)

Bell Potter thinks that Rural Funds could be an ASX dividend stock to buy.

Its analysts recently noted that the agricultural property company’s “share price has continued to remain subdued and trading at its largest discount to market NAV since listing.”

In addition, the broker is forecasting some attractive dividend yields for investors. It is expecting dividends per share of 11.7 cents in FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.04, this will mean yields of 5.7% for investors.

Citi has a buy rating and $2.25 price target on its shares.

The post Buy Rio Tinto and these ASX dividend stocks appeared first on The Motley Fool Australia.

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More reading

• At 20x earnings and a 4% yield, surely I can’t ignore this ASX 200 stock?
• Rio Tinto share price marching higher amid record Aussie solar power agreement
• Boost your second income with these buy-rated ASX dividend stocks
• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares
• ASX 200 mining stocks underperforming as Andrew Forrest shutters WA nickel mines

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group and Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) ended the shortened week with a gain. The benchmark index rose 0.5% to 7,555.4 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to rise again

Another positive session is expected for the Australian share market on Monday. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.4% higher this morning. On Friday on Wall Street, the Dow Jones was up 0.15%, the S&P 500 fell 0.1%, and the Nasdaq dropped 0.35%. This couldn’t stop the latter two indices from recording solid weekly gains.

Oil prices climb

It could be a decent start to the week for ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices rose on Friday night. According to Bloomberg, the WTI crude oil price was up 0.85% to US$78.01 a barrel and the Brent crude oil price was up 1.35% to US$83.55 a barrel. Oil prices had their best week since September amid optimism over US economic growth and Chinese stimulus.

ResMed shares named as a buy

ResMed Inc (ASX: RMD) shares are in the buy zone according to analysts at Goldman Sachs. In response to its second quarter update, the broker has reiterated its buy rating and lifted its price target on the sleep treatment company’s shares to $33.50. Goldman said: “We believe there is sufficient positivity to continue to see asymmetric upside risk at current valuations.”

Gold price broadly flat

It looks like it could be a subdued start to the week for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price traded broadly flat on Friday. According to CNBC, the spot gold price was up a fraction to US$2,018.2 an ounce. Traders appear nervous ahead of the US Federal Reserve’s interest rate meeting this week.

Sell Beach Energy shares

The team at Goldman Sachs thinks investors should be selling Beach Energy Ltd (ASX: BPT) shares. This morning, the broker has retained its sell rating on the energy producer’s shares with a slightly improved $1.66 price target. This sell rating is due largely to its valuation. The broker said: “While we see upside potential for BPT trading at a ~10% discount to NAV, we currently see more attractive opportunities within our upstream energy coverage with average ~20% upside.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• How long does it take to become a millionaire with ASX shares?
• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth
• Here’s how I’m targeting a generous ASX passive income in retirement!
• Here are the top 10 ASX 200 shares today
• Santos share price rises on $2.3 billion revenue from ‘challenging year’

Motley Fool contributor James Mickleboro has positions in ResMed and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Selling ASX shares is difficult.

“Unlike with the decision to make an investment, selling it requires you to undo something in which you have already invested intellectual, emotional and financial capital,” Fidelity investment director Tom Stevenson wrote in the UK’s The Telegraph.

“That is psychologically hard to do.”

There is plenty of advice everywhere — including here at The Motley Fool — about which stocks to buy, but you only see a fraction of that volume focusing on selling.

But even the hardiest long-term investor needs to offload their shares sometime, so it’s worth thinking about why and when you would do that.

Stevenson helpfully laid out some of the valid reasons why an investor should sell, and some of the worst drivers for doing so.

Good reason #1: investment thesis is broken

Many amateur investors forget why they bought certain shares in the first place.

And that’s why, later down the track, they struggle to figure out whether they should sell.

“It is impossible to judge whether your investment thesis has changed if you don’t know what it was at the outset.”

This is why Stevenson has a valuable tip for all investors.

“Write it down. Keeping an investment diary can give you something tangible against which to measure your decision,” he said.

“It’s good to remind yourself why you got together all those years ago!”

Good reason #2: bad news

If the circumstances for the business have changed, then it might be time to consider cutting the stock loose.

Of course, the chances are that by the time you’ve realised this, so has everyone else.

According to Stevenson, while markets are “pretty good at pricing in change”, it is often terrible at realising “the scale or durability” of the new situation.

“This is why selling after bad news can still make sense,” he said.

“Humankind cannot bear very much reality. It can take quite some time for the penny to drop, and a share that has fallen by 50% can still lose another 100%.”

Good reason #3: you made a mistake

An excellent reason to sell shares is that buying it in the first place was an error of judgement.

“We all do it. Indeed, a successful investor can be one who simply makes more good decisions than bad. 

“If you run your profits and cut your losses, a hit rate of only 50% might be good enough.”

Good reason #4: reduce risk

Reducing the risk of sticking with a winner is an “underrated reason” to sell shares, reckons Stevenson.

If you have a multi-bagger on your hands, just sell the amount that you invested in the first place. From that point on you can’t do any worse than a 0% loss.

Stevenson remembers he once told a friend to do this.

“At the time he could have done this by selling as little as a third of his holding. Doing so would have ensured that the worst possible outcome would be just getting his money back.

“He didn’t and it wasn’t.”

Good reason #5: changes in personal circumstances

There are a myriad of reasons in your personal life that could prompt you to sell shares.

“Your risk appetite may have changed, and you can no longer tolerate the potential downside of an investment.”

One day you might just need the cash.

“That, after all, is the reason we invest in the first place. To be able to spend our money one day in the future. Eventually, that day arrives.

“Meanwhile, you might be lucky and find that one or two good investments have shifted your portfolio away from your desired weightings. Rebalancing is a good reason to sell.”

Bad reason #1: you made a profit

For Stevenson, selling ASX shares because you’ve made a profit is the worst reason to do so.

He does admit that psychologically this is “the easiest circumstance in which to bail out”.

“Securing a profit provides temporary validation. 

“And if the investment fails to notice that you have sold it and continues to rise, it’s easy to look the other way.”

But stocks have no memory, so exiting an investment just because it has made money makes no sense. The money made says nothing about the future prospects.

“Having a target price sounds sensible but it rarely makes sense to exit a winning trade. The trend is usually your friend.”

Bad reason #2: you made a loss

By the same logic, to sell ASX shares just because you’ve copped a loss is also a mistake.

“At times, it can make sense to draw a line under a failed trade, but never simply because the price has gone down,” said Stevenson.

“This tells you nothing except what other investors are doing and how deeply ingrained is your loss aversion. It says nothing about the investment itself or whether you should stay or go.”

Bad reason #3: you are scared or bored

Offloading stocks because you are alarmed by the market or the world at large is a classic case of acting from emotion rather than logic.

“If the news headlines are so grim that you want to hide in a corner until things look better, you can be sure every other investor feels the same way. 

“That can be a recipe for abandoning an oversold investment that’s ripe for a rebound.” 

To sell shares out of a duty to be doing something is also dangerous.

“The only worse emotion than fear as a trigger for selling is boredom,” said Stevenson.

“Very often we just feel we need to do something. Invariably we shouldn’t.”

The post 5 best and 3 worst reasons to sell your ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• How to generate $10,000 of passive income from BHP shares
• 3 world-class ASX retirement shares to buy now
• Here’s an ASX dividend stock under $10 to buy for monthly passive income
• 3 ethical ASX shares poised to outperform in 2024

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It was another busy week for Australia’s top brokers. This led to the release of a large number of broker notes.

Three ASX broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

CSL Ltd (ASX: CSL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $334.00 price target on this biotechnology company’s shares. Morgan Stanley has been looking at plasma collection data. It was pleased with what it saw in respect to collections and the company’s network rollout. In light of this, it remains very positive on the company’s outlook. The CSL share price ended the week at $293.00.

IDP Education Ltd (ASX: IEL)

A note out of Bell Potter reveals that its analysts have retained their buy rating on this student placement and language testing company’s shares with a trimmed price target of $25.00. The broker acknowledges that the company could be impacted by policy changes in Canada in the near term and has downgraded its earnings estimates to reflect this. Nevertheless, it remains very positive on the long term and is forecasting strong earnings growth through to at least FY 2026. The IDP Education share price was fetching $19.67 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Analysts at Goldman Sachs have upgraded this conglomerate’s shares to a buy rating with an improved price target of $62.90. The broker believes that the key Bunnings business is well-positioned to benefit from a more resilient Australian housing outlook. It expects this to lead to the hardware business generating annual cashflow of $2.5 billion to $3 billion, which will support Wesfarmers’ growth opportunities such as in health and lithium. The Wesfarmers share price ended the week at $58.45.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Why Block, Domino’s, IDP Education, and Sayona Mining shares are sinking like stones today
• Why this broker just upgraded Wesfarmers shares to a buy rating
• 3 no-brainer ASX stocks I’d buy before a bull run
• Top brokers name 3 ASX shares to buy today
• Is now the right time to buy CSL shares? Here’s my take

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goldman Sachs Group, Idp Education, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended CSL and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With the iron ore price booming at the moment, Australia’s largest miners are swimming in cash.

This bodes well for owners of BHP Group Ltd (ASX: BHP) shares, which could receive some big dividends in 2024.

But how many shares would you need to own if you wanted to receive $10,000 in passive income from the Big Australian this year? Let’s find out.

Passive income from BHP shares

According to a note out of Goldman Sachs, its analysts are expecting BHP to reward its shareholders with a fully franked US$1.49 per share dividend in FY 2024.

Based on current exchange rates, this would mean a dividend of $2.26 per share in local currency. It also equates to a 4.75% dividend yield.

Based on this forecast, investors would need to own approximately 4,425 BHP shares in order to generate $10,000 of passive income this year.

Unfortunately, this would mean a rather significant investment. At the current share price, investors would need to put $210,364.50 into BHP shares to receive the desired amount of income.

But Goldman thinks it could be worth it. It has a buy rating and $49.40 price target on the miner’s shares. This means that your 4,425 units could have a market value of $218,595 before dividends.

Furthermore, while Goldman is forecasting a dividend cut in FY 2025, a decent payout is still expected.

It has pencilled in a fully franked dividend of US$1.18 per share (A$1.79 per share). If this proves accurate, your 4,425 BHP shares would yield a further $7,920.75 in dividends over the 12 months.

That’s a total of almost $18,000 of passive income over the next two financial years.

The post How to generate $10,000 of passive income from BHP shares appeared first on The Motley Fool Australia.

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More reading

• ASX mining stock doubles in value in 30 minutes on news of BHP deal
• ASX 200 mining stocks underperforming as Andrew Forrest shutters WA nickel mines
• How I invest and make money from ASX mining shares
• Top brokers name 3 ASX shares to buy next week
• Why the BHP share price has a nickel thorn in its side

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re building a retirement portfolio then it could be worth checking out the ASX shares listed below.

They are all high-quality businesses, leaders in their field, and have positive earnings and dividend outlooks.

Here’s what you need to know about them:

Telstra Group Ltd (ASX: TLS)

The first ASX retirement share to look at is Australia’s largest telco, Telstra.

It has the type of defensive qualities that you would want from a retirement portfolio holding. It also offers an above-average dividend yield, which is tipped to grow.

For example, Goldman Sachs is forecasting fully franked dividends per share of 18 cents in FY 2024 and 19 cents in FY 2025. Based on the current Telstra share price of $4.00, this will mean yields of 4.5% and 4.75%, respectively.

Goldman has a buy rating and $4.70 price target on its shares.

Transurban Group (ASX: TCL)

Another ASX retirement that could be a buy is Transurban.

It is the toll road giant behind roads including CityLink, Cross City Tunnel, AirportlinkM7, and 95 Express Lanes, as well as the Linkt, Expresslane, A25 Smart Link platforms.

The team at Citi sees Transurban as a top option to buy right now. In fact, its analysts “see upside to DPS guidance from CPI-linked tolls.”

The broker is forecasting dividends per share of 63 cents in FY 2024 and 65 cents in FY 2025. This will mean yields of 4.8% and 4.9%, respectively.

Citi has a buy rating and $15.90 price target on Transurban’s shares.

Woolworths Limited (ASX: WOW)

A final share to look at buying is Woolworths.

It is the retail conglomerate behind the Woolworths supermarket chain, Countdown supermarkets in New Zealand, and Big W. It also has a growing presence in the pet care market.

Much like the others, it has the defensive qualities that you would want from an ASX retirement share.

Goldman Sachs is a very big fan of the company. So much so, it has Woolworths on its coveted conviction list.

It expects its omni-channel advantage and potential market share gains to underpin fully franked dividends per share of $1.15 in FY 2024 and $1.25 in FY 2025. This will mean yields of 3.2% and 3.45%, respectively.

Goldman has a conviction buy rating and $43.30 price target on Woolworths’ shares.

The post 3 world-class ASX retirement shares to buy now appeared first on The Motley Fool Australia.

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More reading

• At 20x earnings and a 4% yield, surely I can’t ignore this ASX 200 stock?
• Retirees: 2 Top ASX dividend shares I’d buy now for passive income in 2024
• Woolworths share price in the red as CEO denies trying to ‘cancel’ Australia Day
• Brokers name 3 ASX dividend shares to buy now
• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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